Beijing passed a message last week when it tested the J-20, its new generation locally produced stealth fighter, from an airbase in Sichuan on the day US Defence Secretary Robert Gates landed in China to discuss resumption of defence ties. Intended as a direct threat to US carrier fleets in the region, the J-20 is expected enter service within the decade and is part of the wider modernisation of the Chinese military which is moving ahead at a fast pace.
Tellingly, the same day as the J-20 flight, Defence Minister AK Antony was in Bangalore announcing progress in our own locally produced Light Combat Aircraft (LOCA), Tejas, in Bangalore. A low to medium range fighter, it is still a long way from induction. For an aircraft that is being built for nearly three decades, the project is grossly over-budget and overdue and the old joke about the LCA being our ‘Last Chance Aircraft’ is understandable. Except that the joke is on us.
The Defence Minister followed his Bangalore trip with the release of a new Defence Production Policy, the central aim of which is to achieve self-reliance in defence production.

According to this policy, indigenous manufacture of defence equipment will be preferred and foreign sources will be tapped only if Indian industry is not in a position to deliver on time.

With the usual epithets about over-dependence on imports in defence being unacceptable and predictable hosannas about our own capacities at the launch function, the Defence Minister was essentially repeating what has been the standard line in South Block for over 50 years.

The problem is that this line has basically led us up a garden path so far. Self-reliance is, of course, a vital strategic need but let us be honest. India’s defence budget was up to $30 billion in 2009, but roughly 70% of our requirements, especially hi-tech ones, still come from imports.

The Defence Research and Development Organisation (DRDO) is the “best funded research institution in India” but so far “it has not produced a single weapons system that could alter the country’s strategic situation,” according to a recent study of India’s military modernisation by Stephen Cohen and Sunil Dasgupta.

Despite small successes in submarines sonar and systems integration, what DRDO has to show for itself is basically a long list of white elephants: the LCA; the Arjun tank, which the Army finds no future in; and the missile programme which has only seen the Prithvi missile inducted so far (the much touted Akash and Trishul missiles are way off as well). All of these are years behind their targets and seriously over-budget.

The problem is a peculiarly Indian mixing of technology with nationalism. The pattern is the same every time there is a weapons need. DRDO has right of first refusal and on every demand by the armed forces and gets it foot in the door by promising cheaper local options.

This immediately blocks the option of buying the best available weapons and the sunk costs are then used to justify spending more money on indigenous systems. As Cohen and Dasgupta show in their comprehensive survey, DRDO’s dual role as a research agency, supplier and evaluator has been disastrous.

To be fair, DRDO claims that the Army keeps changing its requirements in between projects. Between an overconfident DRDO that almost always over-estimates its capacities; a politician-bureaucrat ruling class that has little knowledge of defence issues; and defence services that have systematically been kept out of strategic decision-making, we have a state of stasis.

The result: the Indian armed forces are essentially operating today with the same equipment as they were two decades ago. This has finally forced India to now embark on one of the costliest arms purchases in the developing world, accounting for some 8% of known global arms imports.

To the government’s credit, there has been an attempt to reform DRDO and open up defence production for the private sector. But the opening still remains mired in too many grey areas. Getting a level playing field for private companies interested in the sector remains a challenge and numerous changes to previous procurement policies do not inspire much confidence.

What we needed was a clear roadmap for a new phase in Indian defence modernisation, with clear rules and a transparent playing field. A new departure was needed. What we have got instead is a short document that essentially retains tired lines from the past.

Albert Einstein once defined insanity as doing the same thing over and again and expecting a different result. The solutions for reform in defence spending and acquisition are there in various committee reports, such as those headed by Vijay Kelkar and most recently by P Rama Rao. The problem is not so much in finding the right solutions but in having the political will to reform an inefficient system.